IRD'S mileage rate increases for the 2017 income year

The IRD's mileage rates for the 2017 income year for vehicles with business travel of 5,000 or less in an income year have been set as follows:

• Petrol vehicles - 73 cents/km
• Diesel vehicles - 73 cents/km
• Hybrid vehicles - 73 cents/km
• Electric vehicles - 81 cents/km

Taxpayers can choose to use the IRD's mileage rates or use actual costs if they consider that the IRD's mileage rates do not reflect their true costs. Sufficient records need to be kept to support actual costs claimed.

Employers can choose to use the mileage rates as a reasonable estimate of costs when they reimburse employees for the use of their private vehicle for business related travel.  Employers can also choose to use an alternative estimate from a reputable source such as the NZ Automobile Association. 

For the 2018 income year onwards, the IRD has made changes to its mileage rates.  Specifically, the 5,000km limit will be removed and a new two-tier mileage rate calculation will apply.  The IRD is yet to publish the mileage rates for this new two-tier system.